Firm racial segregation and affirmative action in the highway construction industry

Firm racial segregation and affirmative action in the highway construction industry In this paper I document that highway construction firms in California, particularly those owned by blacks and Asians, exhibit considerable racial segregation in that they are disproportionately located in zip codes with the greatest concentration of own-race residents. I find that segregated firms serve a larger market than minority-owned firms that are not segregated and that this effect is concentrated in black-owned firms. I next exploit the segregation of firms to examine the effect of affirmative action on the success of minority-owned firms. Following the significant curtailment of affirmative action in California due to a direct statewide ballot initiative, the number of highway construction establishments located in zip codes with the highest concentrations of black and Asian residents fell relative to the rest of the state, even conditional on the number of non-construction establishments. This suggests that affirmative action policies may play a role in the net survival rates of minority-owned firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Firm racial segregation and affirmative action in the highway construction industry

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Publisher
Springer US
Copyright
Copyright © 2009 by The Author(s)
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-009-9204-8
Publisher site
See Article on Publisher Site

Abstract

In this paper I document that highway construction firms in California, particularly those owned by blacks and Asians, exhibit considerable racial segregation in that they are disproportionately located in zip codes with the greatest concentration of own-race residents. I find that segregated firms serve a larger market than minority-owned firms that are not segregated and that this effect is concentrated in black-owned firms. I next exploit the segregation of firms to examine the effect of affirmative action on the success of minority-owned firms. Following the significant curtailment of affirmative action in California due to a direct statewide ballot initiative, the number of highway construction establishments located in zip codes with the highest concentrations of black and Asian residents fell relative to the rest of the state, even conditional on the number of non-construction establishments. This suggests that affirmative action policies may play a role in the net survival rates of minority-owned firms.

Journal

Small Business EconomicsSpringer Journals

Published: May 6, 2009

References

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